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Canadian Natural Resources to buy Devon Canada's assets

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Staff writer ▼ | February 20, 2014
Canadian Natural Resources announces entering into an agreement relating to the acquisition of Devon Canada's Canadian conventional assets, for an aggregate cash consideration of $3.125 billion.
Devon Canada
Devon CanadaCanadian Natural Resources announces entering into an agreement relating to the acquisition of Devon Canada's Canadian conventional assets, for an aggregate cash consideration of $3.125 billion.


Devon Canada's Canadian conventional assets exclude Horn River and the heavy oil properties. Aggregate cash consideration is effective January 1, 2014, with a targeted closing date of April 1, 2014.

The acquired lands and production base are all located in Western Canada in areas adjacent or proximal to Canadian Natural's current operations and are high quality, concentrated liquids-rich natural gas weighted assets, with additional light crude oil exposure.

The current estimated production, before royalties, from the acquired properties is approximately 383 mmcf/d of natural gas, 10,800 bbl/d of light crude oil and 12,000 bbl/d of NGLs and is approximately 72% operated.

Along with the production are associated key strategic facilities including 6 major owned and operated natural gas plants, with gross processing capacity in excess of 1,000 mmcf/d, and 4 major owned and operated oil batteries. Finally, the assets also include a high quality land base of approximately 2.2 million net acres of undeveloped land and 2.7 million net acres of royalty and fee simple lands.

Company Gross proved reserves (excluding the royalty lands) associated with the acquisition, as evaluated by an independent qualified reserves evaluator as at December 31, 2013 using forecast prices and costs, were 272.2 million BOE. The acquired asset package includes a royalty revenue stream which is targeted to earn approximately $75 million in cash flow during 2014.

Canadian Natural is reviewing the options to combine the acquired royalty revenue stream with its own royalty revenue portfolio for either the creation of a new vehicle to provide steady cash flow to current shareholders or monetization through a sale package later in 2014.

The targeted cash flow from the combined royalty revenue streams is expected to be between $140 million and $150 million in 2014.


 

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